BOARD OPERATIONS

 Oct. 1, 2010 — When the earthshaking court ruling in 40 West 67th Street vs. Pullman came down in 2003, it solidified that co-op boards are corporate boards, and that its decisions fall under the same Business Judgment Rule that applies to a regular, professional-business corporate board. But with great power must also come great responsibility, as a not-so-itsy-bitsy spider-writer once said — and that means board members may sometimes have to consider whether to self-report wrongdoing to outside agencies or regulators.

Must you always, to stay in the clear legally? Surprisingly, the answer is no. Here's why….

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Sept. 28, 2010 — A co-op board member asks: "I would like to know whether my co-op board should let purchasers of our apartments see the board minutes. It seems to me this could be an invasion of our privacy especially because they're not even shareholders."

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Sept. 24, 2010 — When a shareholder at a 300-plus unit co-op in Bayside, Queens, asked to speak to the co-op's managing agent this past July, nothings seemed unusual about the request. But the conversation, the managing agent recalls, was hair-raising: Did the managing agent know that a new sublessor in the co-op was listed on the New York State registry of sex offenders?

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Sept. 17, 2010 — If you don't have a new-owner welcome kit, you're missing a great opportunity to educate newcomers about co-op / condo living in a way that builds community and a farm team of association volunteers — and may help with collections later.

"It's important for a number of reasons to have a welcome committee to educate new owners," says Matthew A. Drewes, a partner at the law firm Thomsen & Nybeck in Edina, Minn., who represents associations. "They don't realize there are likely to be rules and regulations regarding certain things, especially exterior maintenance or alterations to their [apartments]. They also may not realize it if there are restrictions on rentals or rules on how units can be rented and even that there can be pet and other restrictions."

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Sept. 14, 2010— Sometimes being on a co-op board or condo board is like being on Racket Squad. Only baby-boomers with long memories will recall Racket Squad, a Dragnet-wannabe from 1950s television that supposedly reenacted cases ripped from the police files. Unlike today’s Law & Order, however, these were not murders but scams perpetrated against innocent “marks” (victims) who were easily taken in by the clever bunko artists. “Remember,” said Captain Braddock, the host and narrator of the documentary-like program, at the conclusion of every episode, “a man can pat you on the back with one hand — and pick your pocket with the other. And it could happen to you.”

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Sept. 10, 2010 — These colors, as they say, don't run — and neither do co-op shareholders and condo unit-owners who want to fly the American flag. Yet a number of co-op boards, condo associations and homeowners associations (HOAs) object to the flag and/or flagpoles. If your co-op/condo board wants to forbid flags, you'll need to walk a fine line in terms of federal law, shareholder/unit-owner consensus, passion regarding a national symbol and plain old common sense: Legal battles cost money, and even if you win on a technicality you're going to lose the public-relations fight against Mom, apple pie and, well, the flag.

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Sept. 3, 2010 — "If this rule is implemented, we're screwed," says the prominent New York attorney and co-op advocate Stuart Saft, a partner at Dewey & LeBouef — only he didn't use the word screwed. "This rule is arbitrary, capricious and will destroy one important source of financing in the co-op and condo community."

What has gotten him so incensed is a new rule the federal government has proposed — but not yet implemented — that would restrict Fannie Mae, Freddie Mac and the Federal Home Loan Banks from making loans to buyers on properties encumbered by a "Private Transfer Fee Covenant," more commonly known in New York as a flip tax.

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August 24, 2010 — Our condo association was close to going belly up. I didn't know it at the time, and no one else, including the condo board, seemed to know it either.

I didn't think there would be problems when I bought into our 166-unit condominium, built in 1951. It was supposed to be my home away from home, a one-bedroom apartment that my wife and I could spend time in when we weren't at our house in Pleasant Valley, N.Y. We moved in soon after my retirement from IBM where I spent 36 years doing almost everything from fixing computers to becoming a senior manager. I hadn't thought about the board or the management company when I started living there. But then construction work on the front of the building seemed like it was going on forever, and the condo had received multiple shutoff notices from Con Ed. That made me feel like someone was not paying the bills.

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August 20, 2010 — If a co-op disturbs the painting and wallpapering in an apartment in pursuit of repair, may the shareholder recover money for the cost of restoring it? Normally you'd think not – generally plastering and priming is all that's required. But a special circumstance required a judge's decision, in Baker v. Bay Terrace Co-op Section XII, a Queens County small claims court case.

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August 16, 2010 — When the co-op board at the 16-unit building at 54 East First Street in Manhattan asked its managing agent to shop for a new mortgage so the co-op could refinance and take advantage of lower interest rates, it fortuitously found one that not only did that, but allowed the co-op to fund necessary upgrades and make the building greener simultaneously. Your cooperative apartment house or condominium can do likewise — even in this tight lending times.

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